Irish whiskey is exploding at the moment but the market for Irish whiskey in the United States focuses primarily on blended whiskeys and a lot will need to happen before the category is able to chip away at the incredible lead that our Scottish cousins have in the single malt category.
Unless you have been living under a rock recently you may have noticed that the world of Irish whiskey is exploding rapidly. The countless articles, across every medium, are heralding the current explosion of new distilleries and innumerable new whiskey brands hitting the scene. If you’ve got even the slightest interest in the industry, I’m sure that you have picked up a hint that these are exciting times indeed.
The top destination for the metaphorical freight train that is Irish whiskey is in-fact, the United States. Each week, newly bottled brands arrive on those star spangled shores with hopes of adorning back bars and off licence shelves in every state, from Massachusetts to California and back again. Of course, Irish bars will be the first obvious target as the new brand teams attempt to etch out a niche for themselves in the ever crowded marketplace of brown spirits in the U.S. Although, the first battle that these brands will need to face is not battling Bourbon or Scotch for pride of place, it is finding out where in the underdeveloped Irish market they actually fit into. Now, I know that calling the Irish market, which is only growing these days, underdeveloped, seems kind of weird. Let me explain.
So first things first, Bourbon and Scotch are the names of the game in the alcohol industry in the U.S. at the moment but Irish whiskey is having an increasingly flirtatious fling with the U.S. consumers. The name Jameson has basically been ingrained in the minds of nearly every alcohol consumer across the country. It has such a recognition value that the words “Irish whiskey” are almost synonymous with Jameson Irish whiskey (kudos to their brand team on that one). Almost ironically, it’s Jameson’s immense push as a shot whiskey that brought Irish whiskey back from the brink but also has hindered premium brands from successfully penetrating the U.S. market.
The reputation that Jameson has carved out for itself in the United States with the average consumer is that of a spirit that goes great as a shot with a beer or something to be buried in a mixed drink. For many years this was the only way that consumers were being presented Irish whiskey and it has created a funny space for the category in the mid-priced category in bars and off-licences.
New entrants to the United States’ market from the emerald isle have two choices; they can attempt to price themselves below that of Jameson or proceed to be price premium to the most famous Irish whiskey. Pricing below the behemoth of Irish will put the brand at a low cost value segment which yields lower profits but will hopefully yield better returns through volume. The premium choice places the product in a price category that will contest directly with our Scottish malt cousins.
Cheap and cheerful supermarket brands of Irish whiskey do exist in the U.S. but the majority of the newly bottled Independently Bottled (IB) brands will be storming the beaches of places like Boston with the words “single malt whiskey” emblazoned across their chests with hopes of becoming the next big thing in Irish whiskey. They have chosen the premium end of the market as their hunting grounds where they will attempt to make their names and fortunes. As I previously mentioned the amount of new brands popping up every day are innumerable and they are all beginning to clamber for the same market. But with everyone shooting for the same goal, shouldn’t someone actually set up the metaphorical goal posts first? You can’t conquer a market if it doesn’t exist yet.
Irish whiskey, unfortunately, sits in the shadow of the behemoth Jameson and its recognisable value for money shot reputation. People perusing their local back bars or the shelves at the liquor store for a plus premium “sipping” Irish whiskey are few and far between. Consumers who are willing to part with a little extra of the monthly paycheck for premium alcohol are often wooed by the prestigious reputation that Scotch whisky holds. Our Scottish cousins have carved out a very successful niche as the whisky of those who wish to experience the distinguished lifestyle. It can be seen as a status symbol and something to brag about when pouring it for friends. And as such, Scotch whisky has the single malt market sown up tight for the time being. Just like the aforementioned Irish conundrum of “Irish whiskey” being synonymous with Jameson, the words “single malt” are almost symbiotically tied to that of “Scotch”. This is actually so rampant in some parts of the U.S. that Scotch has become so commonly used to mean whiskey that it has now taken on a new accidental adjective to reference any form of whiskey; I’ve been asked for my favourite “Irish Scotch”, “American Scotch” and even “Japanese Scotch”.
I hear you saying, but single malt means single malt, does it matter where it comes from? And, unfortunately it does seem like it matters whether or not the product is associated with that all important word “Scotch”. There are generations of people who have grown up with the idea that Scotch is the be all and end all of premium whisky. Irish whiskey has a reputation as being a bit more fun but also a tad less complex or fancy. This certainly has an effect at the cash register when someone is looking for their evening’s tipple or a gift for friends. Think I’m exaggerating? Check out the IWSR sales numbers for Irish and Scottish whisk(e)y in 2016.
The global Scotch whisky market realised just over 91million 9 litre cases (12 bottles of 750ml whiskey, this is an industry metric for measuring spirit sales), this number includes grain whisky, blended and malt whiskies together. If we separate the malt whiskies we see that Scotland realised just over 9 and a half million 9 litre cases of malt whisky world-wide. Comparing this to Irish whiskey as a whole we see the huge disparity between the two industries. Irish whiskey managed to flog a grand total of 8.688 million 9 litre cases last year. This means that the entire Irish whiskey market is actually 10% smaller than the Scottish malt whisky market alone, never mind the rest of the Scottish whiskies after that. This truly highlights the behemoth size of the Scottish whisky and malt whisky markets compared to the Irish producers.
So when you take a moment to step back from the hype of all these new brands and the cluttered shelves of the bars around Ireland we can see in the world’s largest market we have a lot of ground to cover. Yes, single malt whiskey is probably the most recognisable style of whisk(e)y in the world but that doesn’t mean we can just dump freshly labelled bottles on the shelves and expect them to sell themselves. This article is intended to highlight that we need to work to educate consumers, bartenders, shop owners and anyone who will listen. Ireland makes some incredible whiskey and this market in the U.S. is incredibly young and under supported at the moment. It will need a lot of supportand servicing before we are able to start taking sizable chunks out of the Scotch malt numbers. Brands need to ensure that bartenders and store owners have enough at their disposal to sell the product adequately and hopefully quickly. Getting a product to move off the shelves quickly is half the battle to having it re-ordered and to ticking up the sales number for premium Irish whiskey. Either way, we have a huge potential market ahead of us, we just need to work to build these metaphorical goal posts that all these new brands (and many established brands) are attempting to score in. Developing this market will take a long time, what in whiskey is ever really quick, but it is important that we actively try and improve the consumer expectations of Irish whiskey if we are ever going to challenge Scotch for top spot.
So, you now know what to do the next time you are sitting at a bar that stocks every whiskey you’ve ever heard of. Scan the back bar. Find an Irish malt that catches your eye. And do your part, and have a glass or three, and finally and most importantly enjoy the liquid in the glass because if it’s Irish, it’s probably a good taoscán (Irish word for dram)